Dato’ Rohana Rozhan, Group Chief Executive Officer of Astro, said: “In pursuit of our journey of reinvention, Astro is embracing change brought about by digital and mobile while staying true to our core as a consumer-first company. Our growth today is underpinned by continued strengthening of our propositions to households and commercial customers in Malaysia. At the same time, we are aggressively securing engines for future growth by building an ecosystem comprising watch, listen, read, shop and serve for the individual’s increasingly digital lifestyles in Malaysia and regionally. We do so by leveraging off our scale, investments, relationships and ongoing persona. Regionally we will forge complementary win-win partnerships, as well as identify strategic and opportunistic investments for our growth portfolio as well as giving us a seat at the table to learn from value creators and disrupters of the future.”

As part of a strategic longer-term growth portfolio, Astro entered into a binding term sheet with Grup Majalah Karangkraf Sdn Bhd (GMK) on 6 December 2017 to form a joint venture, whereby Astro will invest RM100mn for a 51% stake in Karangkraf Digital 360 Sdn Bhd. The joint venture would extend Astro’s online presence amongst the Malay-language audience, propel its combined monthly unique visitors to approximately 10mn and is in line with its goal to build Nusantara and Islamic content verticals. The JV aims to pursue 360° monetisation strategies for the Karangkraf Digital’s content IPs across multiple platforms, leveraging on Astro’s capabilities, growing reach and engagement.

Aggressively defending its home proposition

Astro’s customer reach and engagement are growing in strength, with its home proposition serving 5.3mn, or 73% of Malaysian households, having registered a net growth of 313k customers driven primarily by NJOI. Astro has also been able to address shifting consumption patterns, as evidenced by the 50% y-o-y growth in the number of connected PVRs to 702k and connected households watching an average of 60 hours of content weekly, which is 150% higher than linear households. More Astro customers are also watching content on their mobile devices, as Astro GO registered users have increased by 36% y-o-y to 1.5mn, while average weekly viewing time among active users rose 49% y-o-y to 197 minutes.

Astro’s regional mobile and individual first propositions are growing in popularity. Its regional online video streaming service, Tribe saw a 92% increase in registered users in six months to 2.5mn in Indonesia, the Philippines, Thailand and Singapore. Go Shop, Astro’s e-commerce service, continues to resonate with customers with an increase in its registered customers by 39% y-o-y to 1.2mn in Malaysia and Singapore. Recently, Go Shop has partnered DiGi.Com Bhd’s digital arm Digi-X to offer ‘e-cash on delivery’ option, vcash, to Go Shop customers for the convenience of cashless payments when shopping on its TV, online and mobile platforms.

Achieved Adex Growth in a Contracting Market

Astro’s total Adex grew marginally by 0.4% to RM526mn, against the backdrop of an 8% market decline, leading to a larger share in TV Adex and Radex at 44% and 74% respectively. The better performance is attributed to strong TV viewership share of 77%, market leading weekly radio listenership of 16.5mn and 7.4mn monthly unique visitors on Astro’s digital properties. Gempak is Malaysia’s top entertainment portal with 2.1mn unique visitors and 11.8mn page views per month while Astro Awani registered 3.0mn unique visitors and 11.2mn page views per month on its news network.

Besides consistently creating new signature vernacular IPs that resonate among viewers on TV and mobile screens, Astro’s movies are also making waves on the big screen. Its latest hit, Abang Long Fadil 2, became the highest grossing local movie ever in Malaysian cinemas with a gross box office of RM18mn. Together with Polis Evo, The Journey and Ola Bola, 4 of the top 5 local movies to date are produced by Astro.

In extending its reach to a new generation of listeners, who are tech-savvy, mobile and socially connected, Astro Radio has launched two new radio brands; Zayan targeting progressive Muslims and goXuan for trendsetting Chinese Gen Z in October 2017. With the latest additions, Astro Radio now has in total 11 brands under its portfolio, offering the widest choice for over 16.5mn listeners as well as offering advertisers a larger platform to reach their target audience.

Astro also launched a new entertainment start-up, Rocketfuel Entertainment to offer influencer marketing and talent management services under one roof. It already manages over 100 influential personalities in beauty, fashion, lifestyle, automotive and parenting across ASEAN with a cumulative social media reach of over 36mn.

Investing in Content Verticals for Scale

Key to Astro’s digital and business transformation is carving out deep and differentiated content verticals, namely Nusantara, Horror, eSports, Kids and Islamic, that have the potential to reach the over 650mn consumers in ASEAN. Astro is committing significant resources and is pacing up its execution to realise its regional ambitions. In October 2017, its horror content vertical, Boo, achieved an important milestone with the launch of its first original series, 3 A.M. Bangkok Ghost Stories.

Strong Progress in Digital Transformation

With Astro’s household penetration now at 73%, the company has been aggressively building capabilities and market presence in the individual space, which will in turn drive new revenue streams in digital advertising, OTT content and e-commerce. These new domains have tremendous growth potential and are gaining ground rapidly, through means both organic and inorganic; and they are instrumental to its continued value creation. In light of this, Astro is committed to ensuring that its abilities match its aspirations.

As Astro progresses along its 3-year digital transformation with Amazon Web Services, it has been building capabilities namely in software development, AI, data analytics, video delivery, ads technologies and e-commerce. The group has also made strides in tooling its workforce digitally to boost productivity, reduce cost to serve and enhance customer experience through omni-channel and personalisation. Astro is confident that its agility and readiness to address change will equip it to compete and capture opportunities in the new digital economy. In recognition of the group’s strong progress in its digital transformation journey, IDC Asia Pacific recently awarded Astro with the Digital Transformer Award for Malaysia.

Outlook

Rohana said, “As a group, we are committed to growing our businesses of today by reinforcing and complementing our value propositions in the homes, and our reach and engagement to our advertisers. At the same time, we are driving our growth engine of tomorrow in the digital life spaces, Nusantara content vertical and commerce both in Malaysia and ASEAN. In doing so we are confident that we will continue to build on existing core revenue streams whilst driving profit growth by embracing digitalisation and cost economics. Concurrently, the investments we are making in new growth areas will make certain we are able to sustain strong and continued value creation for our shareholders.”